UK Music Venues Face Dramatic Rise in Property Taxes

Major concert venues across the UK, including London’s O2 Arena and Co-op Live, are set to face significant increases in property taxes, with projections indicating that some tax bills could more than double within the next three years. An analysis of official data carried out for the Press Association reveals that the rateable values of these venues have surged by as much as 300%, resulting in substantial financial burdens for operators.

According to global tax firm Ryan, the Valuation Office Agency (VOA) data shows dramatic increases in property valuations for venues across England and Wales. The O2 Arena, which has hosted notable artists such as Usher, Lady Gaga, and Billie Eilish this year, is projected to see its property tax bill rise by nearly £2 million by the 2026-27 financial year.

Rising Costs for Major Venues

Other prominent venues are also feeling the impact, with Manchester’s Co-op Live, Manchester Arena, and Ovo Arena Wembley witnessing escalating rateable values. Chancellor Rachel Reeves confirmed in her budget statement on November 26 that new business rates for commercial properties will be based on valuations made in 2024. A new reduced multiplier will be applied to calculate overall bills, although the rise in property taxes remains a concern.

The VOA assesses the value of these venues based on their economic performance rather than market rents, as they are seldom available for lease. The increased valuations largely stem from data collected during 2021, a period when many arenas faced closures or restrictions due to the pandemic.

While larger venues benefit from a transitional relief cap limiting first-year bill increases to 30%, they are still on track for sharp tax hikes in subsequent years. Ryan estimates that tax liabilities for these venues could more than double by 2026-27, further straining an already challenged sector.

Impact on Smaller Venues and the Live Music Scene

Smaller music venues across the UK are also bracing for steep increases in business rates, prompting concerns among industry leaders. Mark Davyd, chief executive of the Music Venue Trust, has called on the government for immediate action to provide greater relief for music venues. He warned that many smaller establishments may face closure, leading to higher ticket prices for concertgoers.

In an interview with the Press Association, Davyd stated, “It’s going to have to be passed on (in ticket prices).” He emphasized that large-scale live events are often organized on slim profit margins, stating, “Live music is expensive to stage. There’s a huge number of people that you never see.”

He cautioned that the rising costs could deter artists from touring the UK or lead them to shorten their tours. “Music has been singled out to be attacked with incredibly high rateable values,” he added. “It looks as though nobody realized that was going to happen and therefore there are no plans to manage it or mitigate it. The Government needs to step in as an urgent measure.”

Among the most affected venues, Wembley Arena has experienced the steepest percentage increase, with its rateable value soaring by 300% to £3 million. This will result in a business rates bill increase of £124,875, bringing the total to £541,125 for the 2026-27 financial year.

The O2 Arena is projected to face a staggering increase of £1.8 million, raising its overall tax liability to £8 million by 2026-27, following a 175% surge in its rateable value to £30.5 million. Co-op Live, which opened in Manchester in May 2024, is expected to see its tax bill increase by £432,900, bringing it to £1.9 million. Similarly, Manchester Arena anticipates a rise of £386,280, pushing its total to £1.7 million.

Birmingham’s Utilita Arena is facing a £166,500 increase in business rates, bringing its total to £721,500, while Liverpool’s M&S Arena & Convention Centre will see a tax hike of £507,825, resulting in a total of £2.2 million.

Alex Probyn, Ryan’s practice leader for Europe and Asia-Pacific property tax, noted the impact of transitional relief. “Transitional relief will soften the first-year impact, but bills can still more than double over the three-year cycle,” he said. With such dramatic valuations, he advised operators to scrutinize the VOA’s assumptions closely to ensure fair assessments.

As the UK music industry grapples with impending financial pressures, the call for government intervention grows louder, emphasizing the need for support in a sector that has faced unprecedented challenges in recent years.